Aura Approved in Canada!
Brian Marckx, CFA
Health Canada Approval
This morning (10/19/2011) Verisante Technology (V.VRS, VRSEF) announced that they received marketing approval from Health Canada to market Aura. This marks a major milestone for Verisante and is a testament to the company's ability to get Aura commercialized.
Verisante will now begin preparations for the roll-out in Canada. CE Mark for approval to sell Aura in Europe and Australia is next in line – which could come by the current year-end. As we've noted in the past, the initial roll-out will be a progressive process and, as a result, we model only limited revenue through the end of 2012. By that time, Verisante's distribution and production should be in full-swing and revenue could begin to ramp much faster.
Financial Model
We have made no changes to our model as a result of today's announcement as we had been anticipating the news. We also have not adjusted our price target (remains at $2.60/share), although we feel Canadian regulatory approval reduces downside risk in the share price and provides further support that the stock trades cheaper than warranted. While the stock is up over 125% since we initiated coverage of Verisante in February, we think it could still triple from today's price ($0.88) over the course of the next six months.
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